Samsung Electronics Co expects operating profit for the first quarter of this year to rise 50.3 percent, the South Korean tech giant said in a statement yesterday, despite global supply chain woes.
The world’s biggest smartphone maker said first-quarter operating profit would be about 14.1 trillion won (US$11.6 billion), up from 9.4 trillion won in the same quarter last year.
Samsung did not provide details on the performance of its various divisions.
Photo: EPA-EFE
It is expected to release its full results on April 28.
Analysts said the forecast was likely driven by strong smartphone sales, but warned of an expected drop in profits in the memorychip division.
“Price decline in memory chips will be contained on the back of stronger than expected demand,” IBK Investment & Securities co analyst Kim Un-ho said in a report.
Profits in Samsung’s mobile business are expected to soar 55.8 percent year-on-year to more than 4.1 trillion won, offsetting an anticipated 6 percent decline in profits from its memorychip division, the report said.
With chips used in a wide-ranging array of devices and cloud servers — essential for remote working during the COVID-19 pandemic — the sector has become less dependent on seasonally-driven demand for gadgets such as smartphones and laptops.
Last year saw a surge in chip prices amid strong demand for those used in personal devices and data centers, helping Samsung post record annual sales.
Kim forecast that the conglomerate would post 60.5 trillion won in operating profit for this year overall, a 17 percent year-on-year increase.
However, Samsung’s smartphones division was in hot water in its native South Korea in the past few weeks over a pre-installed app called Game Optimizations Service on the latest Galaxy S smartphone lineup. Designed to fine-tune system performance, consumers claim that it throttled the speed of thousands of non-gaming apps.
The issue forced Samsung vice chairman Han Jong-hee to apologize at a shareholders’ meeting last month, and prompted a class action lawsuit by nearly 2,000 people seeking 300,000 won in compensation each.
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